Handbag Maker's Shares Sink Despite Narrower Loss

Concerns about thinner margins at Kate Spade & Co. overshadowed news of a narrower loss and a surge in demand.

The handbag and fashion company said its gross margin narrowed to 58.6% in the quarter ended July 5 from 61.8% a year earlier, driven by discounts needed to clear excess inventory at its lower-priced Kate Spade Saturday brand. The...